7.3.5 Conversion process

The roles regarding the conversion of a BV into an OVR are comparable with the conversion described in § 7.2.3. Some requirements, however, show differences.

Art. 7:835 paragraph 2 sub a DCC prescribes that the resolution for conversion requires adoption by a two-third majority of the votes cast in the general meeting. Consequently, the conversion can even be forced upon a large minority shareholder. This minority shareholder is better off than the minority shareholder who does not consent to conversion of the BV into an NV, but is worse off than the minority shareholder who does not consent to the conversion of the BV into an association, a cooperative, a mutual insurance society, or a foundation. In the latter situation, the significantly higher threshold of 90% of the votes is prescribed. Moreover, similar to the other kinds of conversion, the resolution for conversion has to be adopted in accordance with the requirements regarding the amendment of the articles of association.1 Although percentages are always arbitrary, I have no principal objections to sticking with the aforementioned percentages.

Statute does not require a resolution for amendment of the articles of association, as the articles of association will not be amended, but will be replaced by a partnership agreement. This is another difference between a Book 2 DCC conversion and a Book 7 DCC conversion.

Secondly, a notarial deed must be drafted that includes the partnership agreement. The literai wording of Art. 7:835 paragraph 2 sub b DCC seems to prescribe that the (complete) partnership agreement should be included in the notarial deed. This leads to a remarkable contrast with Art. 7:802 DCC, which merely prescribes that the notarial deed should indicate at least that the partnership is a legal person, its name, its objects and its seat.2 Thirdly, the partnership agreement must indicate the estate of the BV and its constituencies as well as the amount of the economie interests of each of the partners in the equity of the OVR, in view of the shares each of them holds in the capital of the BV.

Fourthly, similar publication requirements apply as described in § 7.2.3. Lastly, authorization of the court is required for the conversion of a BV into an OVR. For the proceedings regarding the authorization, the court orders the convening of the shareholders who have not consented to the resolution for conversion.3 It should be noted that the order to convene the non-consenting shareholders is not found in the conditions for the conversion of a BV into a foundation or association (as found in Art. 2:18 DCC).

Statute does not prescribe a notice of no objection for conversion of the BV into an OVR or CVR. This makes sense, as the articles of association will not be amended, but will be replaced by the partnership agreement. According to the Minister of Justice, no notice is needed because this prescription does not apply to the OVR.4